TIF Surplus Bill Would Force More Transparent Accounting; But City Says Cupboard Is Bare

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Illinois Democratic Legislators, joined by Chicago Aldermen and the Chicago Teachers Union yesterday morning announced plans to introduce legislation in Springfield that would compel Chicago to declare an annual TIF surplus to fund the financially beleaguered Chicago Public Schools, and direct the city to conduct more transparent accounting of how much money in each TIF has been committed to projects.

But whether or not there are funds available to actually be declared surplus is up for debate.

At yesterday’s press conference, chief bill sponsor and Illinois House Democratic Leader Barbara Flynn Currie asserted that the city has anywhere between $150 and $350 million in uncommitted funds that could be declared surplus. She said in this emergency situation, instead of those funds being dispersed to local taxing bodies like Parks and the Metropolitan Water Reclamation District, all of those TIF funds would be given to CPS. “The potential impacts of inaction to address CPS’ financial needs are potentially far greater than the impact of less TIF surplus to the various non-home rule taxing districts,” a press release from sponsors says.

A briefing document to muster support for Currie provided to Aldertrack earlier this week had claimed an even bigger surplus: $445 million or as much as $700 million.

Ald. Carlos Ramirez-Rosa (35), who is leading a charge for TIF accounting on the City side, told Aldertrack after a sit-down with the Department of Planning and Development, he figured the TIF in his ward, Milwaukee/Kedzie, had about $24 million alone that “could be” surplus. “There are a lot of tricks,” he said, what’s marked as “earmarked” might not really be earmarked.

And there’s sometimes confusion among aldermen about how TIF money is spent. Last week, for example, some Finance Committee members pushed back on spending $4.6 million in TIF money to be used for an athletic field for Jones College Prep and National Teachers Academy in the 3rd Ward. Aldermen were surprised to find that the field had already been built, and they were just reimbursing CPS. Not only that, the money was being “ported” to the contiguous Michigan/Cermak TIF from the 24th/Michigan TIF. The TIF money hadn’t been doled out yet at the request of local Ald. Pat Dowell, who wanted an MOU in place between “CPS, the Board of Education, the community, and the two schools” for open use of the field. Confused yet?

Budget officials with the city estimate the real surplus is far below what Currie, Rosa, and their colleagues estimate. Chicago Budget Office spokesperson Molly Poppe told Aldertrack yesterday that while the city has $1.38 billion in TIF accounts, only $140 million is not already committed to projects. Of that, “$113 million was surplused in the 2016 budget,” she said. The rest, Poppe says, is already committed to bond payments or in accounts with less than a million dollars in their balance. This past summer, the Mayor announced the City would freeze seven downtown TIFs, and estimated the move would free up $250 million over the next five years, half would go towards CPS.

The source of the dispute is that Chicago is only required to report TIF account funds once a year, and even then, a whole six months after the fiscal year is complete–providing an out-of-date snapshot. In addition, allies of Flynn Currie on the bill allege the city can say funds are “committed” without actually providing a contract, essentially budgeting for incomplete deals and walling them off from being surplused.

“[The legislation] only allows for ‘obligation’, things that are already contracted out or payments made to debt service. What the city has been successful at doing is obscuring the number because they have the loophole of anticipated [spending],” said Davis Gates.

CTU is optimistic the bill will pass the legislature, especially since Flynn Currie ranks second in the House to only Speaker Mike Madigan.

“We anticipate it will pass. We have a good sponsor,” said Davis Gates.

Yesterday, Ald. Rosa announced he has 30 aldermen co-sponsoring a resolution calling for the city to declare a TIF surplus so funds could be directed to CPS.

“We need to open the books and figure out what projects have been voted on by the City Council. If they’re not going to break ground for two or three years, that’s money that’s on the table and should be declared surplus,” he told Aldertrack last night.

A Council source also told Aldertrack that the Mayor’s Office is considering either holding an aldermanic briefing or a Budget Committee hearing on available TIF funds next week.